Performance Appraisal Methods in Strategic HRM

Clarke and Layman (2004) support this point of view. They mark that the company has to keep in mind the outcome it wants to achieve when recruiting employees. The authors suggest regarding an organization as a kind of a mosaic. The only way to assemble it is to choose the right pieces. Therefore, only the most useful employees for the company have to be employed. “It is critical to go out and assemble the components to build the mosaic; those component members will assist the organization in satisfying its goals and objectives. ” (Clarke, Layman 2004: 80).

Those organizations which have failed to employ correct people for key positions are destined to fail in the market. According to Odom (1995), every company which wants to be successful in the current constantly changing and competitive environment needs to apply strategic tools when recruiting personnel. “Pre-employment screening is the key to a quality work force for the company that wants to survive into the twenty-first century. ” (Odom 1995: 66). The author agrees with the fact that this approach might be more costly for the company in the beginning because the hiring process will take more time.

However, after employing right people for all

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of the key positions, the company will not need to look for new employees for these positions in future, as employee turnover will be very low. Slowik (2001) also supports strategic approach to recruitment and selection. However he mentions that it does not need to be as complicated as some companies offer. There has to be balance because extremely complicated recruitment process will scare away potentially qualified employees.

The top employees might find it humiliating to go through complicated recruitment process. The author emphasizes that for best results, recruitment and selection process needs to be very goal-oriented and simple at the same time. Most experts in human resources management currently agree that it is very important to create a recruitment plan in order to employ the best resources for the company in the shortest period of time. The recruitment plan has to be based on the strategies and principles which are common for every company.

According to Clarke and Layman (2004), “the four core strategies should include: branding, pursuit of a diverse labour pool, marketing the organization’s brand and career opportunities, and public relations. ” (Clarke, Layman 2004: 83). The strategy of branding refers to the strategy of establishing the image of the company which potential employees are able to perceive. After creating a unique image of the company in the labour market, the recruiters might be surprised to see new highly-qualified people applying for jobs in it, those who never thought of applying before.

According to the strategy of the pursuit of a diverse labour pool, the companies need to ensure the recruiters conduct an extensive analysis of skills which current employees have and their influence on the performance of the company. The research of skills and qualifications which the company is currently lacking also needs to be provided. Based on the available information, recruiters will be able to tell what employees need to be hired in future in order to fill the gaps in skills and qualifications among current employees.

The strategy of marketing the organization’s brand and career opportunities is also very important to address. Companies have to realize that they need to engage their current employees in the recruitment process. In order to take advantage of this approach, recruiters can apply brainstorming techniques among their current employees, including the recently-employed people. A well-developed public relations strategy is also very important for the companies.

Such companies need to make sure they widely advertise themselves and especially provide public relations campaigns to attract talented students of top educational establishments. Performance appraisal is particularly important for all of the organizations because it enables them to determine the contribution of every employee to the performance of the company. Performance appraisal is currently one of the most important issues in human resources management which “continues to be a subject of interest and importance to human resource specialists.

” (Hornsby et al. 1996: 10). Bernardin & Klatt (1985); Hall, Posner, & Hardner (1989); Maroney & Buckley (1992); Thomas & Bretz (1994) have all devoted considerable attention to the development of theoretical models of performance appraisal. How can a manager of the organization make a conclusion about the necessity to promote this or that employee, increase of decrease his salary, shift him to another department? How can the manager decide which employee needs special training or which can perform on the highest level without additional training?

The most efficient tool in such a case is performance appraisal. If carried out correctly and on the basis of efficient methods, performance appraisal can be very helpful for the evaluation of employees’ work. What needs to be kept in mind is that there is no possibility to find one completely efficient method. All of the methods will have both advantages and disadvantages. Comparative standards include straight ranking method; alternative ranking method; paired comparison method; forced distribution method.

All of these methods are inappropriate in strategic HRM because they only compare employees but do not determine their contribution to the performance of the company and the level of achievement of their goals. Absolute standards include narrative essay; critical incidents method; weighted checklists; forced choice; Behaviourally Anchored Rating Scales (BARS); Behavioural Observations Scale (BOS). They are more efficient and could be applied for performance appraisal of employees in strategic HRM management. However, they have many disadvantages.

Narrative essay is more a qualitative description than a quantitative method of appraisal. It would not provide all of the important data about the performance of the employee. Critical incidents method is efficient only to some extent because it provides information about the employee’s behaviour only in critical situations. Weighted checklists can be useful but they have a very large impact of the appraiser’s opinion, and weighting coefficients can sometimes be applied incorrectly. Forced choice does not meet developmental needs and does not allow the appraiser to interpret the ratings correctly at times.

Behaviourally Anchored Rating Scales (BARS) and Behavioural Observations Scale (BOS) are too complex methods. Objectives-based approaches include Management by Objectives (MBO) and work standards approach. These approaches are the most suitable for the performance appraisal in strategic HRM. In many jobs goals are pre-determined for many years ahead of time: for example, a salesperson needs to ensure he or she sells as much merchandise available in the store as possible. There can be no better appraisal methods for such positions than objective-based approaches.

Management by Objectives (MBO) is a very efficient method. Its mechanism is relatively simple. “As customarily practiced today, supervisors and their subordinates sit down at the beginning of each year, or every six months, and agree (often in writing) on specific goals to be accomplished. At the end of the period, the supervisors evaluate their subordinates in terms of how well they have met those objectives. ” (Rice 1985: 33). Work standards approach is similar to MBO except that organizations determine goals and appraisal techniques on the basis of their past experience.

The successful implementation of this appraisal technique in companies is based on the understanding of the major goals by employees in the position. The management needs to ensure the employee realizes his goals and foes his best to achieve them while working in his position. This appraisal method needs to be used once every couple of months in order to determine the performance of the employee and identify the most important issues which need to be developed. The adjustment of goals needs to take place very often due to the challenging nature of the position.